Suppose that your firm's current unlevered value is $800,000,and its marginal corporate tax rate is 35%.Also,you model the firm's PV of financial distress as a function of its debt ratio (D/V)according to the relation: PV of financial distress = 800,000 × (D/V)².What is the firm's levered value if it issues $200,000 of perpetual debt to buy back stock? A)$820,000. B)$869,555. C)$920,000. D)$350,000.

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The Answer of Suppose that your firm's current unlevered value is $800,000,and its marginal corporate tax rate is 35%.Also,you model the firm's PV of financial distress as a function of its debt ratio (D/V)according to the relation: PV of financial distress = 800,000 × (D/V)².What is the firm's levered value if it issues $200,000 of perpetual debt to buy back stock? A)$820,000. B)$869,555. C)$920,000. D)$350,000.

Suppose That Your Firm's Current Unlevered Value Is $800,000,and Its